Occidental Petroleum (Oxy) and its subsidiary 1PointFive announced an agreement with XRG, an investment company of Abu Dhabi National Oil Company (ADNOC), to evaluate a potential joint venture to develop a direct air capture (DAC) facility in South Texas. As part of the joint venture, XRG will consider investing up to US$500 million for the development of a DAC facility designed to capture 551,156 tons (500,000 tonnes) of carbon dioxide (CO2) per year. The Strategic DAC Framework Agreement was signed by Occidental president and chief executive officer (CEO), Vicki Hollub, and ADNOC CEO Dr. Sultan Ahmed Al Jaber in the United Arab Emirates.
The announcement follows several significant milestones in the development of DAC, including Oxy’s progress on STRATOS, its first DAC facility in West Texas, which is on-track to start commercial operations in 2025; further de-risking of Occidental’s DAC technology; and an award from the US Department of Energy (DOE) for up to US$650 million to support development of the South Texas DAC Hub.
“We are proud to advance our decades-long partnership with ADNOC and XRG on our South Texas DAC Hub, which we believe will deliver game-changing technology to support US energy independence and global goals,” said Hollub. “Agreements like this, along with DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas.”
“Our longstanding partnership with Occidental continues to drive scalable, high-growth, and strategically attractive projects that create long-term sustainable value,” said Khaled Salmeen, chief operating officer of XRG. “The US is a priority market for XRG and we look forward to building on this partnership as we continue to invest in strategic projects across the energy value chain.”
Occidental and ADNOC have been discussing opportunities to collaborate on carbon capture, utilization, and storage projects in the United States and UAE since signing a memorandum of understanding in 2023.
The South Texas DAC Hub, located on the King Ranch in Kleberg County, Texas, will be close to industrial facilities and energy infrastructure along the US Gulf Coast, where CO2 can be transported for use or securely stored in geological formations. The site comprises approximately 165 square miles of acreage with the potential to store up to 3.31 billion tons (3 billion tonnes) of CO2.
The first DAC facility at the Hub is expected to capture 500,000 tonnes of CO2 per year and is currently in front-engineering and design.
